Eastern District of New York Looks to Mediators to Expedite Sandy Cases

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In 2012, Super Storm Sandy destroyed an estimated 650,000 homes and affected over 300,000 businesses along the Atlantic seaboard. Affected homeowners and businesses have filed over 1,000 Super Storm Sandy-related insurance coverage actions in the Eastern District of New York. That number is expected to double or even triple in the coming months.

The district has developed a special program to expedite those cases.

“Most of our cases involve property damage or business interruption claims filed against insurance companies by homeowners and businesses hit by Sandy. For cases brought under the National Flood Insurance Program, there have been all kinds of issues involving FEMA rules and filing deadlines,” explains Magistrate Judge Robert Levy, the district’s Alternative Dispute Resolution (ADR) judge.

Another complication arises from the way claims are administered differently depending on the cause of the damage.

“For example, damage caused by wind is typically covered by private carriers, whereas claims for flood damage are generally reimbursed by the federal government but administered by private carriers under federal regulations. Some claims involve both wind and water. Handling these claims can be tricky because they involve so many moving parts,” Levy said.

Magistrate Judges Cheryl Pollak, Ramon Reyes, and Gary Brown were tasked as a committee by Chief Judge Carol Bagley Amon to develop a rational case management plan. The committee decided that unless there’s a legal issue that has to be resolved, ADR was the way to quickly resolve the cases. According to Levy, ADR gives a little more leverage to the parties to resolve cases on their own. It also may be less expensive than, for example, a trial.

“The case management order allows for some preliminary discovery and threshold legal issues to be decided, where necessary,” Levy said, “but most cases will be sent to early ADR through mandatory mediation or, in some instance, arbitration.”

The Eastern District of New York’s mediation program was one of the first in the country, and maintains a panel of screened, trained, and certified private mediators—but too few to handle the expected influx of cases.

“We knew we had to recruit more mediators,” said Levy. “We went to the Nassau County Bar Association, and the New York City and Long Island ADR community. We went to the Federal Bar Council. We went to law schools. And we ended up with close to 100 mediators. These are people from big private practices, small firms, and sole practitioners.”

Last month the court invited all the mediators to a full day of training. Plaintiffs’ and defendants’ liaisons, along with claims adjusters and expert investigators explained the factual disputes likely to arise over wind and water damage claims. An associate general counsel from the Federal Emergency Management Agency detailed the intricacies of the National Flood Insurance Program and FEMA’s role in administering it. The meteorologist –in-charge for the National Weather Service in New York explained how the storm surge plus extremely high tides made Sandy more devastating than previous storms.

In the next few weeks, the court expects to refer the first wave of cases to mediators.

“We don’t know how many cases we’ll have in the next few weeks to mediate,” said Levy. “If it’s 200 cases, and we have 100 mediators, we’ll try to figure out the most efficient way. We’ll try to let lawyers choose the mediators where reasonable, but we want to distribute the cases around so none of the mediators burn out.”

Meanwhile, several of the district’s magistrate judges working to settle a sampling of the cases are trying to gauge how complex the cases will be and how much time it may take to mediate each one.

“My colleagues have invested a tremendous amount of time and effort into developing a court-wide process to resolve these claims quickly, fairly and efficiently,” Levy said. “Sandy was a huge blow to so many people in our district. We are hopeful that by addressing these claims expeditiously, the court will be able to provide some relief for those who are still suffering.”

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